The Effect of Product Quality on Net Trade in the Manufacturing Sector: Contrasts between Developed and Developing Countries

Xiaonan Liu, Hayley H. Chouinard
2016 Social Science Today  
This paper determines and compares the effects of product quality on the value of net trade in the manufacturing sector of developed and developing countries. By incorporating the intensity of consumers' preferences for quality, we identify quality impacts on net trade. We estimate the quality effects for 25 developed countries and 17 developing countries from 1989 to 2010. We conclude that product quality is positively related to net trade, and developed countries experience a higher quality
more » ... fect. The variation of GDP per capita and average number of product varieties in the manufacturing sector could explain the different quality effects across country types. JEL Classification: F14
doi:10.12735/sst.v3n1p01 fatcat:lndabykt7rflrpypchkngbufs4